Question

Stockholders' Equity. (Note: an example for this problem will be worked in class on Monday, June 11. You might want to wait until Monday evening to try this problem.)

                           Given the following information for Company G at 1/1/16:

                  Retained earnings at 1/1/16 were $800,000.

                  Common stock at 1/1/16 was $ 300,000.

                  Additional Paid-in Capital at 1/1/16 was $900,000.

         The description of the common stock at 1/1/16 was: $10 par value, 100,000 shares authorized, 30,000 shares issued and outstanding.

         During 2016 (its second year), Company G had the following activity:

1. The income statement reflected net income of $200,000 for the year ended 12/31/16.

2. Cash dividends of $1 per share were declared and paid to the common shareholders in February of 2016.

3. On June 1, 2016, Company G declared a 100% stock dividend.

4. On July, 1, 2016, Company G distributed the 100% stock dividend.

5. On September 1 of 2016, Company G repurchased 2,000 shares of its own stock at $25 per share. Company G uses the cost method to account for treasury stock transactions.

6. On December 1 of 2016, Company G reissued 600 shares of the treasury stock at $22 per share.

A. On the answer sheet, prepare journal entries for Items 2 – 6 above.

B.   On the answer sheet, complete the Statement of Stockholders’ Equity for Items 1 – 6 above.

C. On the answer sheet, complete the Stockholders' Equity section of the balance sheet at December 31, 2016, including the appropriate description for the common stock and treasury stock.

B. ( 2 points) Statement of Stockholders’ Equity                   APIC - TS

                                  CS             APIC-CS           RE             TS          CS Dividend

                                                                                                               Distributable

      2016 Begin.   ________       _______      _______      _______      ________

      1. Net Inc.      ________       _______      _______      _______      ________

      2. Cash Div    ________       _______      _______      _______      ________

      3. Stock Div. ________       _______      _______      _______      ________

      4. Stock Div. ________       _______      _______      _______      ________

      5. TS              ________       _______      _______      _______      ________

      6. TS              ________       _______      _______      _______      ________

     2016 Ending   ________       _______      _______      _______      ________

I just need the bolded question done.

Answer 1

Calculation parts

Cash Dividend declared and paid (30000 shares * 1) = 30000

Stock Dividend = 30000 shares * 100% = another 30000 share distributed = 30000* $ 10 = $ 300000

Treasury stock purchased = 2,000 shares * $25 per share = $ 50000

Treasury stock reissued at cost = 600 shares * $ 25 = $ 15000

Cash received from reissued = 600 shares * $ 22 = $ 15000

Additional Paid in Capital - Treasury Stock (APIC-TS) = 13200 - 15000 = (-1800)

Statement of Stockholders’ Equity
No.	Transactions	Common Stock (CS)	Additional Paid in Capital - Common Stock (APIC-CS)	Retained Earnings (RE)	Treasury Stock (TS)	Additional Paid in Capital - Treasury Stock (APIC-TS)	Common Stock Dividend Distributable	Total Stockholders’ Equity
	Beginning	300,000	900,000	800,000				2,000,000
1	Net Income			200,000				200,000
2	Cash Dividend			(30,000)				(30,000)
3	Stock Dividend declared			(300,000)			300,000	-
4	Stock Dividend distributed	300,000					(300,000)	-
5	Treasury stock purchased				(50,000)			(50,000)
6	Treasury stock reissued				15,000	(1,800)		13,200
	Ending	600,000	900,000	670,000	(35,000)	(1,800)	-	2,133,200